Today’s health-focused shoppers aren’t just stalking the aisles to find the latest juicing-fad items or whatever vegetable is the “new kale.” They’re hungry for the whole health and wellness package—from information and education, to customized dietary choices, to mental well-being moments, to healthcare solutions. This presents a unique opportunity for grocers, who come by the health and wellness space, well, naturally.
“Food is a natural gateway for grocers to expand into the health and wellness space and to have credibility there—it’s a very logical extension of their core business,” says Carol Spieckerman, retail consultant and president of Spieckerman Retail. “Health and wellness itself encompasses such a broad spectrum of categories, products and solutions; therefore, it’s a big bet and a big opportunity that very few other categories offer … I really can’t think of another opportunity with that scope and potential.”
Research shows shoppers increasingly see their grocery store as an ally for personal/family health and well-being goals. According to the Food Industry Association’s (FMI) U.S. Grocery Shopper Trends 2020, in February 2020, 51% of shoppers agreed their primary grocery store is on their side when it comes to helping them stay healthy. That shot up to 62% in mid-April, amid the growing COVID-19 crisis. “As an essential service provider, the grocery store has always been a local community resource,” says Krystal Register, director of health & well-being at FMI. “However, now they’re enhancing their offerings to be trusted allies as a healthcare destination and one-stop solution.”
For grocers, providing all things health and wellness to shoppers can have vitalizing effects on the business. “It’s an opportunity to drive customer loyalty, drive sales in higher-margin categories, and drive frequent traffic to stores, which is what grocery retail is all about in the first place,” says Spieckerman.
In FMI’s Food Retailing Industry Speaks 2020, grocers say health and well-being is the top factor positively impacting sales and profits (75%), followed by leveraging food to manage or avoid health issues, or “food as medicine” (71%). “On the industry side, there’s a positive impact on business, as retailers have adapted to ensure shoppers and employees are focused on staying safe and healthy,” says Register.
On the consumer side, there’s growing interest in the connection between food and health. “It’s got a new focus now amidst the COVID-19 pandemic with shopper trends and general health concerns,” says Register. “So, the time is right to match those two perspectives up and make sure retailers are meeting consumers’ needs because they’ve got a captive audience. Consumers are actually seeking help.”
Serving body & mind
The pandemic is expected to have lingering effects on health and wellness shoppers’ food choices, with many prioritizing their immune health well into 2021. In The Hartman Group’s Functional Food & Beverage 2020 Report, released in June, immunity topped the list of current use/interest in supplements by condition. Thirty-one per cent of respondents said they’re using immunity-boosting supplements and 37% said they’re interested in using them. While immunity was already a rising area of interest for consumers, The Hartman Group said what’s happening in the current environment pushed it to the top of the list. In the functional food category, immunity was sixth on the list, with 19% currently using functional foods for immunity and 48% interested in doing so.
“[For retailers], being clear with one’s health and wellness offerings and the extent to which they ladder up to things like immunity is going to be very important,” says Shelley Balanko, senior vice-president of The Hartman Group. “In years past, consumers were focused on healthy digestion because they understand it is the root of all wellness. But today, they’re focused on healthy digestion in the service of reducing inflammation and improving overall immunity because they understand immunity is a long-term objective.”
The way to win today’s health and wellness consumers isn’t just to help them cross items off their immune-boosting shopping lists. They need to tie in the physical benefits of foods with the mental and emotional benefits. Take elderberry tea, for example. “That’s a great moment of pause for taking a mental health break but also reinforcing immune function,” says Balanko. “It’s about marketing and merchandising products [to convey that] the retailer is approaching wellness holistically from a mind and body perspective.”
The “mind” part also means helping consumers incorporate brain-boosting foods into their diets. “The consumer is defining wellness more holistically—it’s not just a healthy body; it’s certainly a healthy mind, and that includes one’s emotions but also one’s cognitive functioning,” explains Balanko. That’s given rise to interest in nootropics, a class of substances that support cognitive functions such as memory, focus and creativity.
“Being on point mentally is really important—not just to aging consumers who might be struggling with memory issues or wanting to stave off dementia,” says Balanko. “We see a fairly large portion of millennial and gen Z shoppers interested in improving their cognitive health.”
Natural food retailer Goodness Me! is one grocer that connects all the mind/body dots for customers. It offers webinars and online classes on a range of mindfulness, self-care and well-being topics, including yoga and emotional release therapy. The approach mirrors the retailer’s product offering, which includes not just groceries but supplements, natural health and beauty products.
“Health and wellness is more than just ‘I’m going to buy that healthy-fats snack bar,’ it’s the whole-basket shop of better-for-you groceries—plus the thought that transcends food: ‘what products am I putting on my skin?’” says Laura Collaton, chief revenue officer at Goodness Me! “That’s why we focus our webinars and education on whole wellness. The idea is, ‘How do I feel today? Am I checking in with myself?’ All those things are 360-degree wellness for us, and that’s what feeds not only our business, but our understanding and partnership with our customers.”
Whether it’s products or education, the key for retailers is to take a customized approach, giving health and wellness shoppers what they want, when they want it. “With the on-demand nature of the way content is going in every segment, people want things to be as tailored to their eating trends, styles and preferences as possible,” says Collaton. “They also have less patience when things take up too much brain space or take too much work.” If a customer wants to try the keto diet, for example, customers want grocers to make it easy for them.
Making things easy for customers is the approach Metro is taking with its new “My Health My Choices” program, which is designed to help customers find food and beverage products that meet specific dietary needs. The program categorizes nearly 9,000 products under one or more attributes (there are around 50 in total), including keto-friendly, vegan, fat-free, organic and lactose-free.
In stores, product attributes are displayed on shelf labels and Metro app users can scan product barcodes to learn more. Online, customers can click on a particular category and shop all the products in the category and filter them by section, such as frozen food or beverages.
“Understanding product claims can be complex and even overwhelming for some people—every package is like a billboard of marketing messages,” says Mike Thomson, Metro’s vice-president of grocery merchandising. “There are many certifications like organic and B-Corp, along with the ingredient [list] and Nutrition Facts table that is mandatory on every package. So, we tried to come up with something that simplifies that for the consumer and takes some of the homework out of it.”
For Metro, the guide allows it to take some of the guesswork out of understanding health and wellness shoppers. “In our internal database, we’ll be able to analyze gluten-free products against other gluten-free products, or lactose-free products against other lactose-free items,” explains Thomson. “Our vendors will be able to see it as well … and [we] think that will help them understand where their opportunities are and perhaps where there’s an opportunity to innovate. It will also help our category managers and merchandisers make the best possible assortment decisions.”
Data is definitely a big play for grocery retailers. Myles Gooding, national retail & consumer lead at PwC Canada, sees a big opportunity for grocers to understand the “how” behind health and wellness purchases by having more robust data. The idea is to “cross-pollinate” consumers’ health behaviour into their buying habits, leveraging attributed data to understand those buying patterns, says Gooding.
For example, a shopper persona might be someone who is on cholesterol medication and wants to live life better and is going to follow the doctor’s rules. “Grocers have an opportunity here to buy into the lifestyle, so to speak, and make a fundamental shift from managing and buying products on a transactional level and really understanding how the consumer shops for their health and for their lifestyle,” says Gooding. “That puts a retailer across a lot of categories versus just looking at a product by itself.”
Health goes digital
Another growing area of opportunity for grocery retailers is virtual health and well-being offerings. “We see great opportunities when it comes to enhancing digital communications, e-commerce and health and well-being,” says FMI’s Register. For example, retailers can do virtual store tours, create videos to help kids with food and nutrition information, and offer one-on-one telehealth virtual visits to personalize nutrition education.
Loblaw is making a big bet in the virtual health-care space with the recent launch of its PC Health app, which provides users with personalized tools and recommendations based on their virtual health needs and goals. The app, which is currently available in Atlantic Canada, Ontario and British Columbia, gives Canadians free access to registered nurses and dietitians via virtual live chat. The app also provides educational content along with daily goals and activities that, once completed, earn users PC Optimum loyalty points. Loblaw plans to expand the PC Health app nationally, as well as give users access to real-time virtual care from pharmacists, family doctors and specialists, directly on the app.
Similarly, in the United States, Midwest grocer Hy-Vee recently launched a new dietitian services platform, Healthie. Some services are free, including virtual store tours, “dietitian discovery sessions” and monthly virtual classes led by a Hy-Vee registered dietitian. Consumers also have the option to pay for services, such as the Healthy Habits menu program (US$99), which provides meal plans and product recommendations, and personalized nutrition counselling packages (US$125 to US$250).
Spieckerman says what’s good about the Loblaw program is the company doesn’t appear to be trying to monetize it directly by charging customers for the health and wellness services. “I like the idea that Loblaw is focusing on the value they can bring to customers first.”
For Spieckerman, Loblaw exemplifies another big movement we’ll be hearing more about: telemedicine. Through its Shoppers Drug Mart subsidiary, Loblaw acquired a minority stake in telemedicine company Maple Corp., which helps connect people with doctors and specialists using a smartphone or computer. “Telemedicine is something many retailers are talking about and that’s going to be the next big thing. In that regard, for a grocer particularly, I think Loblaw is on the cutting edge.”
For smaller chains or independent retailers that aren’t in a position to make big moves like this, there are still a number of great ways to engage with health and wellness shoppers. “As corny as it sounds, always think in terms of providing value first,” says Spieckerman. A relatively inexpensive place to start is content, whether it’s providing education in-store and online, or hosting forums on health and wellness topics.
“The overarching goal is to monetize the health and wellness opportunity, but also to become more meaningful to your customers across more areas of their lives,” she says. “Keep them on your platform and within your ecosystem, giving them fewer reason to seek insights, solutions and products elsewhere. That really is the name of the game.”
This article appeared in Canadian Grocer‘s February 2021 issue.